Gross domestic product is a misleading measure of national success (2014) • Hacker News Board

Re: Gross domestic product is a misleading measure of national success (2014)

#11

Post by dopidopHN » Mon, Oct 31, 2022, 10:20 PM UTC

deltree7 wrote: post #4

Nobody makes any policy decisions based on GDP. It's just a proxy of economic activity. Nobody ever said, We (won't) need policy X because we are at Y GDP. Companies make decision based on supply/demand. So, this whole research is kinda pointless. In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.

I’m under the impression that country that are under some IMF settlement process can have a GDP policy tack to a loan.

But I might be wrong, maybe it’s primarily and essentially budget cuts.

At least the GDP is used as a justification metric.

I think we will naturally grow out of it.

Taking economics 101 in a French high school 20 years ago… I was already told it was a imperfect peace of information that have to be compounded.

Re: Gross domestic product is a misleading measure of national success (2014)

#12

Post by pishpash » Mon, Oct 31, 2022, 10:21 PM UTC

dragonwriter wrote: post #8

nonrandomstring wrote: post #7

Reading an earlier thread on Perl I was thinking about how concepts, language and behaviour relate (as Wittgenstein and Ayer might have it). Someone mentioned how, as a Python user, they barely had to think about pointers/references. Things get magically referenced when needed. Seems like progress. When concepts get coded into a language, in this case "economics" (which is a tool for trying to see the world), they pu…

> So, we could certainly try to supplant GDP as a metric. This is very apparent, because it was only about 30 years ago that GDP itself replaced GNP as the preferred metric for the same purposes in the US. The article mentions the use of GDP internationally for longer, but the US preferred GNP until 1991. Its also worth noting that the creator of the GDP, a decade before it became dominant (internationally), also war…

Has anyone used the growth of national wealth, or is that equivalent to GNI/GNP somehow? (I don't think so but maybe?)

Re: Gross domestic product is a misleading measure of national success (2014)

#13

Post by rajeshp1986 » Mon, Oct 31, 2022, 10:21 PM UTC

It is interesting how western countries want to change the metric for economic progress when they are lagging on it. They wouldn't leave GDP as metric if all was well.

Re: Gross domestic product is a misleading measure of national success (2014)

#14

Post by tabtab » Mon, Oct 31, 2022, 10:23 PM UTC

One problem with this idea is that if you don't grow your GDP, countries that do grow it will stomp you militarily and/or diplomatically.

Re: Gross domestic product is a misleading measure of national success (2014)

#15

Post by opportune » Mon, Oct 31, 2022, 10:23 PM UTC

transcriptase wrote: post #6

deltree7 wrote: post #4

Nobody makes any policy decisions based on GDP. It's just a proxy of economic activity. Nobody ever said, We (won't) need policy X because we are at Y GDP. Companies make decision based on supply/demand. So, this whole research is kinda pointless. In fact the worst thing anyone could do is have a metric and make the entire nation focus on that.

Tell that to the Canadian government. It currently considers massive deficits fine because of our debt-to-GDP ratio, despite GDP being driven by a real estate bubble for the last several years.

The Canadian government is also growing their tax base/GDP quickly due to high levels of working-age immigration, not just real estate

Re: Gross domestic product is a misleading measure of national success (2014)

#16

Post by mind-blight » Mon, Oct 31, 2022, 10:25 PM UTC

This should be marked as [2014]

Re: Gross domestic product is a misleading measure of national success (2014)

#17

Post by tabtab » Mon, Oct 31, 2022, 10:25 PM UTC

xnx wrote: post #10

GDP might be the ultimate example of Goodhart's Law: https://en.wikipedia.org/wiki/Goodhart%27s_law

A common example is "lines of code". If you pay by lines of code, then coders will bloat up code to pad their metrics, making it verbose and redundant.

Re: Gross domestic product is a misleading measure of national success (2014)

#18

Post by chrisweekly » Mon, Oct 31, 2022, 10:27 PM UTC

I like Bhutan's constitutional adoption of "Gross National Happiness" as an alternative: https://en.m.wikipedia.org/wiki/Gross_National_Happiness

Re: Gross domestic product is a misleading measure of national success (2014)

#19

Post by tabtab » Mon, Oct 31, 2022, 10:28 PM UTC

knaekhoved wrote: post #2

"... and replace it with a metric which explicitly optimizes for all the policies I personally like."

GPD is also personal choice. There's no Grand Law of the Universe which says GDP should be the primary metric. Its importance is an invention of human minds, out of either human nature and/or historical happenstance.

Re: Gross domestic product is a misleading measure of national success (2014)

#20

Post by tootie » Mon, Oct 31, 2022, 10:29 PM UTC

xnx wrote: post #10

GDP might be the ultimate example of Goodhart's Law: https://en.wikipedia.org/wiki/Goodhart%27s_law

Yup. There is simply no way we can replace GDP with another metric. There's always a thousand smartasses who say the unemployment rate is fake. It's not fake, it's an indicator and can never tell a complete story. Employment, economic activity, inflation, trade are all drowning in data points that inform some specific minutiae.

The solution is to not base policy on indicators but politics needs to keep things simple.